MEDIA AND MARKETING.

At McDonald's, new campaign is do or die

September 04, 2003|By JIM KIRK.

MUNICH, Germany — When asked how well McDonald's Corp.'s radical change in marketing is playing with its all-important franchisees, marketing chief Larry Light--the man on the hook for the new "I'm lovin' it" campaign--said two things.

At meetings, "everyone applauds," he said during a tour of McDonald's restaurants in and around Munich on Wednesday.

"Then over cocktails, individually they say, `Larry, this better work...."'

Light says he knows the risk McDonald's is taking with this sudden, sharp left turn in advertising strategy. An influential franchisee or two has warned him, on occasion, that a half-dozen or so marketing chieftains have come and gone before him in the recent past.

He shrugs at the notion that this may be another one of those do-or-die scenarios.

But it is.

After all, McDonald's has more than customers to please. Right behind them are the franchisees--but sometimes, what the franchisees think comes first.

On Tuesday here, McDonald's unveiled its most dramatic marketing makeover to date--launching its first-ever global advertising campaign, which will eventually roll out in 119 countries. The new campaign, which breaks in the United States on Sept. 29, is aimed squarely at the group of consumers that has all but abandoned McDonald's for trendier places.

With fast-paced vignettes that last only a few seconds, the voice of Justin Timberlake and music from pop hip-hop groups like the Neptunes, the new advertising screams young.

On the surface, it appears to be the right direction for McDonald's.

Its last campaign, "We love to see you smile" was wrong in so many ways that McDonald's executives are still counting them.

No one was smiling at McDonald's when that advertising ran from 2000 through last year. (It was shortened to "Smile" before its death.) Not its customers, not its workers and especially not its franchisees, who saw sales drop like a french fry basket into a vat of hot oil.

But believe it or not, there is great risk in a campaign that hits a chord with the skeptical MTV generation. It will either get cash registers to ring more often or, if kids turn up their noses at it, will turn out to be one of the biggest corporate marketing blunders in American history.

Here is the dangerous line McDonald's and Light are walking: If young people are attracted to go back to McDonald's because of this campaign only to find it still plagued by slow service and the same food it has been serving for years, the campaign could be disastrous. Failing to deliver on the new image could set the chain back on its heels and guarantee that this company, which has a storied history of resisting change, will dare not try it again anytime soon.

And that's nothing to smile about.

Worse for McDonald's is that analysts believe the burger category is as mature as a Chevy Chevelle. Interpretation? It can't afford to lose, because it's not like there are so many more consumers out there to get. McDonald's already gets more than 45 million of them a day.

"I've asked the question, what about 100 million a day?" Light said about the company's strategy to grow through increasing sales at existing stores, instead of building more.

He's nothing if not optimistic.

Light on Wednesday dismissed questions of the timing of the campaign. He said it is imperative that improvements on both the operations side and the marketing side happen at the same time.

Otherwise, "we're just talking to the same 46 million customers. And you can't grow that way."

At the very least, Light, who had been consulting before this gig came along, has something to look forward to win or lose. There's likely one hell of a business book and tour waiting when it's over.

Super Bowl, media consolidation up next? McDonald's is focusing on four key pop culture areas as it rolls out its new advertising. In no particular order they are: music, fashion, entertainment and, of course, sports. Which leads to the next question. With his penchant for big-time exposure, is Light considering bringing McDonald's to the Super Bowl advertising dance this year? He would only say that there have been discussions.

During the past few years, the chain has opted to sit out, and instead chose the cheaper pre-game hoopla for its advertising. But that may change with the timing of the rollout of the "I'm lovin' it" campaign.

Clearly though, all media choices are under the microscope. The top marketing executive has not ruled out consolidating media buying, now mainly shared by Omnicom Group's OMD and Publicis Groupe's Starcom. When asked about rumors of consolidation, Light said: "Everything is on the table."

Extracting itself completely from an agency would prove difficult, especially outside the United States, where media decisions are made locally.